Announcements

    Drinks

      Scope takes no action on the Republic of Estonia's AA- ratings
      FRIDAY, 15/01/2021 - Scope Ratings GmbH
      Download PDF

      Scope takes no action on the Republic of Estonia's AA- ratings

      No action has been taken on the Republic of Estonia following a monitoring review.

      Scope Ratings reviews its ratings either yearly, or at least every six months in the case of sovereigns, sub-sovereigns and supranational organisations. Scope performs monitoring reviews to determine whether outstanding ratings remain proportionate. Monitoring reviews are conducted either by performing a portfolio review in terms of the applicable methodology/ies, latest developments, and the rated entity’s financial and operational aspects relative to similarly-rated peers; or through targeted reviews of an individual credit. Scope publicly announces the completion of each monitoring review on its website.

      Scope completed the monitoring review for the Republic of Estonia (AA-/Stable; S-1+/Stable) on 13 January 2021, incorporating the update from the sovereign methodology. The review resulted in no action on the assigned ratings. This monitoring note does not constitute a rating action nor does it indicate the likelihood of a credit rating action in the short term. The latest information on the credit ratings in this monitoring note along with the associated ratings history can be found on www.scoperatings.com.

      Key rating factors

      Estonia’s AA- rating is underpinned by i) a track record of prudent fiscal management supporting low public debt levels; ii) strong governance and commitment to a favourable business environment, underpinned by EU and euro area membership; and iii) improved resilience against external shocks, with falling levels of net external liabilities. The government adopted a large fiscal package to mitigate adverse economic effects from the Covid-19 shock, which alongside the cyclical fiscal deterioration cause the general government debt-to-GDP ratio to increase, nevertheless remaining lower than that of sovereign peers. In addition, Estonia benefits from favourable financing conditions. Challenges relate to i) still moderate per capita income levels relative to those of euro area peers, and moderate productivity growth; and ii) limited economic diversification together with a large export sector relative to the small size of the economy, which exposes Estonia to external shocks. Scope expects broad policy continuity under the next government, including strong support for Estonia’s EU, euro area and NATO memberships, as well as a continued commitment to maintaining Estonia’s sound public finances following the pandemic.

      For the updated scorecards accompanying this review, click here.

      The methodology applicable for the reviewed rating(s) and/or rating Outlook(s) (Rating Methodology: Sovereign Ratings, 9 October 2020) is available on https://www.scoperatings.com/#!methodology/list.
      This monitoring note is issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0.
      Lead analyst: Levon Kameryan, Analyst.
      The final ratings were first released by Scope on 12 September 2016.

      © 2021 Scope SE & Co. KGaA and all its subsidiaries including Scope Ratings GmbH, Scope Ratings UK Limited, Scope Analysis GmbH, Scope Investor Services GmbH, and Scope ESG Analysis GmbH (collectively, Scope). All rights reserved. The information and data supporting Scope’s ratings, rating reports, rating opinions and related research and credit opinions originate from sources Scope considers to be reliable and accurate. Scope does not, however, independently verify the reliability and accuracy of the information and data. Scope’s ratings, rating reports, rating opinions, or related research and credit opinions are provided ‘as is’ without any representation or warranty of any kind. In no circumstance shall Scope or its directors, officers, employees and other representatives be liable to any party for any direct, indirect, incidental or other damages, expenses of any kind, or losses arising from any use of Scope’s ratings, rating reports, rating opinions, related research or credit opinions. Ratings and other related credit opinions issued by Scope are, and have to be viewed by any party as, opinions on relative credit risk and not a statement of fact or recommendation to purchase, hold or sell securities. Past performance does not necessarily predict future results. Any report issued by Scope is not a prospectus or similar document related to a debt security or issuing entity. Scope issues credit ratings and related research and opinions with the understanding and expectation that parties using them will assess independently the suitability of each security for investment or transaction purposes. Scope’s credit ratings address relative credit risk, they do not address other risks such as market, liquidity, legal, or volatility. The information and data included herein is protected by copyright and other laws. To reproduce, transmit, transfer, disseminate, translate, resell, or store for subsequent use for any such purpose the information and data contained herein, contact Scope Ratings GmbH at Lennéstraße 5 D-10785 Berlin.

      Related news

      Show all
      Scope has completed a monitoring review on the United States of America

      21/6/2024 Monitoring note

      Scope has completed a monitoring review on the United States ...

      Scope publishes updated supranational methodology following call for comments

      21/6/2024 Research

      Scope publishes updated supranational methodology following ...

      Global economic update: soft landing reinforces prospect of higher-for-longer interest rates

      19/6/2024 Research

      Global economic update: soft landing reinforces prospect of ...

      Belgium: nationalist parties raise risk of political gridlock and deterioration of fiscal outlook

      14/6/2024 Research

      Belgium: nationalist parties raise risk of political gridlock ...

      Europe’s shifting political landscape, limited fiscal space are challenges to closing investment gap

      12/6/2024 Research

      Europe’s shifting political landscape, limited fiscal space ...

      Scope withdraws its UK Social Housing Providers Rating Methodology

      11/6/2024 Research

      Scope withdraws its UK Social Housing Providers Rating ...